MULN Stock Forecast: Mullen Automotive continues drop day after dilution decision

NASDAQ:MULN fell by 14.36% during Tuesday’s trading session.
Mullen announces that the shareholder vote to increase the amount of common stock has passed.
EV stocks fall as General Motors misses on second quarter earnings.

Stocks Reporter FXStreet

UPDATE: Mullen Automotive stock is down just 1% at $0.8652 at the start of trading on Wednesday. The low volatility is a consequence of the Nasdaq rising 2.3% and MULN shares already declining more than 14% in the previous session. Odds are that the shares will continue moving lower as the recent dilution vote means that the total share count is set to more than quadruple. One might expect the share price to head toward $0.25.

NASDAQ:MULN saw the bottom fall out from under it as a key shareholder vote means the EV startup stock is now heavily diluted. On Tuesday, shares of MULN tumbled by 14.36% and closed the trading session at $0.87. All three major indices fell ahead of the key interest rate hike from the Fed on Wednesday, as well as big tech earnings after the markets closed. Overall, the Dow Jones fell by 228 basis points, while the NASDAQ and the S&P 500 dropped lower by 1.15% and 1.87% respectively during the session.

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Mullen Automotive announced that a preliminary shareholder vote to increase the number of common shares has passed. This effectively increases the number of shares from 477.5 million to 1.75 billion. That’s quite the dilution for current shareholders, which explains why the stock sold off by more than 14% following the news. Voters also approved an increase in preferred shares to 500 million, which means that the total number of shares outstanding is now at 2.25 billion. Mullen stated that it increased the number of shares to be more aggressive with acquisitions and raising capital for future investments.

Mullen stock price

Electric vehicle stocks fell across the board on Tuesday as legacy automaker General Motors (NYSE:GM) missed on its second quarter earnings. GM cited supply chain issues as the primary reason it missed its delivery target of 90,000 vehicles. Other stocks trading lower included Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), and Rivian (NASDAQ:RIVN).

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Stocks Reporter

FXStreet

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